Japan's Three Most Consequential Events of 2020

This article by Kiyoteru Tsutsui was originally published by Nikkei Asia.

This was supposed to be the year that Japan would show the world that it is back.

The last few decades have seen Japan lose its prominence on the world stage, losing the lion's share of international attention to China. With the 2020 Summer Olympics as the focal point, however, Japan had planned on showcasing its technological advances, cultural assets, economic affluence, and social stability and efficiency, to dispel the notion that it has faded as an international power.

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COVID-19 changed everything. The outbreak in the Diamond Princess cruise ship in early February alerted the Japanese public to the power of the virus, and then the death of the famous comedian Ken Shimura in late March brought home its lethal impact. The early COVID domino saw K-12 schools closing on Feb. 27 and the Olympics postponed on Mar. 24. Quickly, tourism declined and the economy slumped as supply chains and production lines were disrupted and consumers mostly stayed home following emergency declarations.

Somewhat surprisingly, the number of cases did not grow exponentially in Japan as it did in the U.S. and Europe. Initially, a conspiracy theory was floated that the government was manipulating the numbers to leave open the possibility for the Olympics to take place, and soon the dominant narrative was that long-standing hygiene practices in Japan of wearing face masks and washing hands were the main reasons for the low number of cases. Despite the recent surge, the number of new cases in Japan has remained two digits below that in the U.S., and the country has avoided the worst of the virus's impact.

Yet, the public gave the government little credit for Japan's relative success. While the legislative measures and guidelines likely helped contain the spread of the virus, some missteps in the distribution of face masks and the economic stimulus package -- confounded by public relations miscalculations -- shaped the public perception that the government does not get what needs to be done.

This, combined with political scandals involving infractions of rules around political funds and elections, put then Prime Minister Shinzo Abe on shaky ground by the summer. But it was the recurrence of the same health concern that ended the first Abe administration that forced him to step down again.

After Abe announced his resignation on Aug. 28, jockeying for his successor ensued, and quickly Yoshihide Suga, Abe's right-hand man as Chief Cabinet Secretary, emerged as a near consensus candidate, earning the support of most of the Liberal Democratic Party's major factions. On Sept. 16, Suga succeeded Abe.

Seen as a scrappy, self-made man belonging to no faction and who cares about regular folk, Suga started off with one of the highest approval ratings for any new prime minister. The air was filled with talk of a snap election, with the LDP poised to win big. In the face of continuing corona concerns, Suga decided against it, giving up his best chance of securing his position beyond next fall when he will face an LDP presidential ballot and a parliamentary Lower House election.

In the few months since, Suga has faced some criticisms: his rejection of the appointment of six scholars to the Science Council of Japan -- seen as retaliation for their earlier criticisms of the Abe administration -- drew the ire of the intellectual community, mostly on the left ideologically, and his foreign policy team appeared soft on China, raising concerns among the right-leaning public. Suga's popularity took a major hit in December when, in response to a surge in COVID cases, he was too slow to cancel his signature Go To Travel campaign that was intended to stimulate the economy by encouraging tourism. His approval ratings collapsed, and all of a sudden Suga finds himself fighting for survival.

While these have been the major events that the Japanese public will remember about 2020, what are the three most consequential events that will have a lasting impact on Japan in 2021 and beyond?

First, the end of the Abe era. Becoming the longest-serving prime minister in Japanese history is a major accomplishment in itself, but Abe was a transformative leader beyond his longevity. In foreign affairs, Abe strengthened the U.S.-Japan alliance, passing significant laws that enabled Japan to play a greater role and managing his relationship with U.S. President Donald Trump better than any major political leaders.

Furthermore, Abe formulated the concept of the free and open Indo-Pacific and developed the Quad, a quadrilateral grouping involving Japan, the U.S., Australia, and India, in the security realm, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Regional Comprehensive Economic Partnership trade agreements, all as a way to counter China's expansionist ambitions.

Seen at first as an anti-China hawk, Abe soon mended fences politically and established good economic relationships with Beijing, working to develop multilateral frameworks to manage China's peaceful rise. These efforts constituted the first time in its post-World War II history that Japan led the world with a vision to build a world order governed by the rule of law, freedom, and democracy, an important legacy that should live on in the post-Abe era.

In domestic politics, Abe completed the process started by the government formed by the Democratic Party of Japan from 2009 to 2012 to strengthen cabinet's power to execute policies. The era of bureaucrats shaping much of Japan's future has ended, and politicians now pursue their own policies with electoral successes as their mandate. The personnel decision-making capacity was the critical component, and Suga, who was the main architect of the new system, will likely entrench politician-led policymaking.

The recent investigations into Abe-era political scandals, for which Abe himself had to respond to prosecutors, demonstrate the downside of concentration of power in the Prime Minister's office. Yet, his legacies will live on in the institutional frameworks his administration developed.

The second consequential event was COVID, not just for the obvious health and economic impact, but also for the unexpected ways in which it expedited a much needed social transformation in Japan. With the stay-at-home order, many Japanese workers experienced for the first time an extended period of telework and realized that it can be even more effective to work remotely from home.

Most employers also realized that telework is a viable option, especially in utilizing the hidden talents, particularly among women and the elderly, who cannot work regular hours but have much to contribute to the economy. Given the widespread concerns about Japan's work-life balance prompted by major instances of death by overwork, this offers an opportunity for the nation to achieve what the government's work-style reform policies had sought to accomplish.

The changes that COVID-19 has forced on Japan will likely expedite Japan's digital transformation too. Suga's administration has promoted digital transformation to cut meaningless red tape -- symbolized by the requirement for hanko, a personal seal, for official documents -- and to bring a more productive and efficient social system that can handle Japan's inevitable population decline.

This new system will offer customized support for citizens, depending on their personal situations, not just on their standardized demographic backgrounds. For example, elderly citizens can now receive different kinds of care and work opportunities depending on their health and career backgrounds, while children's school records can be used to identify areas of concern such as bullying or domestic abuse. With fifth-generation, or 5G, wireless networks becoming accessible to many, Japan is poised to achieve these social transformations and offer a model to the world.

Third-most consequential, but still underrated, was the decision to postpone the Olympics by a year. Until it was announced on Mar. 20, various possibilities surfaced from simple cancellation to postponement for two years. Considering that there was no precedent for postponement, this was uncharted territory.

In the end, the 12-month postponement may have been the best-case scenario. It was a gamble, however, since there were serious concerns about the possibility of the world not being ready by the summer of 2021. Now that COVID vaccines have begun to be distributed, things are looking quite promising for the Olympics to take place next year in Tokyo.

Beyond the actual staging of the games and all that will bring to Japan, the Olympics are important for their long term economic and social impact. Recent studies about the impact of the Olympics on a host country document positive economic impacts that can last as long as 20 years after the actual event, especially in tourism.

Japan had already started betting on international tourism as a major national economic focus and succeeded in increasing tourists dramatically until COVID struck. The infrastructure development required for increased tourism has largely been accomplished and had the Olympics been canceled, much of that investment would have been for naught. The economic impact would have been devastating. With the Olympics likely to be held next summer, Japan can still hope to show the world that it is back after all, just as it hoped to do in 2020.